Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Investor Day (May 2024)
66 slides from Bendigo & Adelaide Bank's investor day presentation, May 23, 2024
Slide 1: Investor day
Investor day 23 May 2024
Slide 2: Introduction
01 Introduction Sam Miller, General Manager Investor Relations & ESG
Slide 3: Acknowledgement of Country
Acknowledgement of Country I would like to begin today by acknowledging the Traditional Custodians of the many lands that we are gathered on. Specifically, I would like to respectfully acknowledge the Gadigal Peoples of the Eora Nation. I would also like to acknowledge the Traditional Custodians of
Slide 4: Agenda and breakouts
01 02 03 Introduction BEN’s Strategy Transformation execution Sam Miller, General Manager Marnie Baker, Chief Executive Officer and Ryan Brosnahan, Chief Transformation Officer Investor Relations & ESG Managing Director 04 Breakouts & Highlights Business & Agri Bendigo Lending Platform Up Adam Rows
Slide 5: BEN's strategy
02 BEN’s strategy Marnie Baker, Chief Executive Officer and Managing Director
Slide 6: Executive leadership team
Marnie Baker Ryan Brosnahan Andrew Morgan Louise Tebbutt Chief Executive Officer and Chief Transformation Officer Chief Financial Officer Chief People Officer Managing Director Taso Corolis Richard Fennell Adam Rowse Bruce Speirs Chief Risk Officer Chief Customer Officer, Chief Customer
Slide 7: Strength, capability, differentiation
Strength Balance sheet Capability People, infrastructure and risk management Differentiation Trust, community and regional values
Slide 8: Shaping the future of banking — our strategy
Shaping the future of banking — our strategy For our customers, our people, partners, communities and shareholders Vision Australia’s bank of choice Purpose To feed into prosperity, not off it Imperatives Reduce complexity Invest in capability Tell our story 08 | Bendigo and Adelaide Bank — Investor
Slide 9: Optimisation
Optimisation 2024 2027 2028 Reduce Continued investment in core technology Data cloud migration; Business and Agribusiness; Productivity complexity Invest in Leveraging digital capability Up; Digital deposits; Bendigo Lending Platform capability Build on our advocacy to help support growth Tell our
Slide 10: Transformation execution
03 Transformation execution Ryan Brosnahan, Chief Transformation Officer
Slide 11: Reducing complexity — from many to one
Reducing complexity — from many to one Completed FY23 Completed FY24 Commenced FY24 Commenced FY24 Core banking system Origination Servicing Internet banking Website Access to broader product range Unlocks power of Bendigo brand advocacy Increased service offering via branches, phone and web Increas
Slide 12: Modernising our technology — building an agile and efficient bank
Modernising our technology — building an agile and efficient bank ~ 50 % 43 % 54 % reduction migrated API reuse 650 328 applications 1% 43% applications 0% 54% applications The data above reflects: 1 April 2020 to 30 April 2024 IT Application simplification Cloud migration API Modernisation ~50% red
Slide 13: Accelerating our digital capabilities — digitising key customer journeys
Accelerating our digital capabilities — digitising key customer journeys Business lending Everyday banking Home lending Saving 'Digital by design, human when it matters' experience Market leading digital-only experience 13 | Bendigo and Adelaide Bank — Investor Day 2024
Slide 14: Accelerating our digital capabilities — mortgage channels
Accelerating our digital capabilities — mortgage channels Current state transforming to Target state Adelaide Bank Brand Bendigo Bank Brand Individual Brands Digital by design, human when it matters BENexpress Adelaide Bank Digital self-serve Relationship Led Brokers Up Qantas Money Direct Third Par
Slide 15: Shared digital capability
Shared digital capability powering all our channels
Slide 16: Accelerating our digital capabilities — sales
Accelerating our digital capabilities — sales Digital term deposit Digital savings account growth account growth 18.2% + 2 1% 50.6% 29.2% 0.3 % +18% Mar 23 Mar 24 Mar 23 Mar 24 In-app ‘join the bank’ experience coming next 16 | Bendigo and Adelaide Bank — Investor Day 2024
Slide 17: Business & Agri
04 Business & Agri Adam Rowse, Chief Customer Officer Business & Agri Veronica Viola, General Manager Strategy, Transformation & Execution
Slide 18: We haven't kept pace with commercial lending growth
We haven’t kept pace with commercial lending growth 1 BEN market share — non-financial businesses1 Our customers and propositions Limited capability to support a shifting customer preference to digital and broker channels. Our people 2.0% Customer facing bankers completing the full customer experien
Slide 19: Our key growth markets and where we will focus
We have identified our key growth markets and where we will focus our energy 1 Trusted brand Deepen relationships Our brand, and community and Making it easier for our existing regional connections are enviable customers to access our products Micro Property strengths to grow from. and services repr
Slide 20: Building a sustainable business and agri bank
We are building a sustainable business and agri bank, investing in the foundations 01 02 03 04 Simplification ABC Platform Rural migration Equipment finance Operating model readiness, Implement market leading Consolidate core Implement new EF simple policy and process CRM and origination platform sy
Slide 21: Our aspiration spans three horizons
Our aspiration for the business and agri bank spans three horizons building foundations growing at leading FY24+ system FY29+ Aligned and compelling proposition Aligned and simplified operating model FY26+ Curated experiences for our Most trusted business and agri bank target markets Digitally enabl
Slide 22: Bendigo Lending Platform
04 Bendigo Lending Platform Richard Fennell, Chief Customer Officer, Consumer Janelle Wehsack, Lead Bendigo Lending Platform Darren Kasehagen, General Manager Third Party Banking
Slide 23: The new Lending Platform makes life easier
The new Lending Platform makes life easier for our customers, staff and partners Reduce Modernise Digitise our complexity our technology our customer experience Retiring legacy brands New technology and improved functionality and Reducing lending decision time capabilities Consolidating core banking
Slide 24: Lending Platform trial results
Launched trial of the Lending Platform — November 2023 6 minutes vs 5 days Time to conditional approval (median) 30 more efficient % 22 faster % 60 uplift % 44 uplift % Full time equivalent staff in Time to unconditional Applications per day Loans passing automatic processing centre approval (median
Slide 25: Our brokers love how we've made things easier
Our brokers love how we’ve made things easier for them “My customers have loved how simple and easy it's been with Bendigo, the post settlement care and welcome call has also been great and has actually taken place” — Nicole My customers are fully aware of who Bendigo Bank is, knowing they are one “
Slide 26: Today, tomorrow, and the future of the Lending Platform
Today, tomorrow, and the future of the Lending Platform We are here FY23 FY24 FY25 FY26 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Consumer lending Build foundations Broker build BEN Broker trial BEN Broker rollout White label / Strategic partners Retail Business consolidations Adelaide Bank — core bank
Slide 27: Up
04 Up Xavier Shay, Chief Executive Officer, Up Ryan Brosnahan, Chief Transformation Officer
Slide 28: Up product features and metrics
LOCKED SAVERS Financial Wellbeing $105M+ Held in 35,000+ Locked Savers 2UP Joint Accounts 26% Of active Upsiders¹ have 2Up joint accounts UP HOME Mortgages $500M+ In Identified Home Savings². 190,000+ $370M+ in settled Up Home Loans SAVE UP 1000 Savings Habit Creation Upsiders started, 17,000+ Compl
Slide 29: Up transactions, deposits and growth
$155B+ Transactions completed since launch #1 Highest rated banking app¹ $2.0B+ Deposits Balance 27%Year-on-year growth. 840k+ Upsiders 80%Word-of-mouth growth², <$50 CPA³ ¹ Up rated 4.9 and 4.8 in App & Play stores respectively at 1-May-2024 29 | Bendigo and Adelaide Bank — Investor Day 2024 ² Cust
Slide 30: Why do customers love us?
Why do customers love us? Tier 1 Drivers of Advocacy - All Up Customers ys do urite app- you gu "This is my favo nking le job making ba such an incredib Improve Leverage !" and saving FUN Channel "i have adhd an d this is the only thing i’ve done consis te ntly for the last ye ar, it’s bright and fu
Slide 31: We're growing as fast as ever
We’re growing as fast as ever Customer Growth Deposit Growth 31 | Bendigo and Adelaide Bank — Investor Day 2024
Slide 32: Up Home
Up Home Up Home Attribution Up Home Funnel Owned Channels(free) Started marketing in earnest Launched Home Zone Un-incentivised referrals (New purchases supported) Soft Launch (Refi only) $370M 65% $500M Homes Settled Loans to Existing Upsiders Identified Home Savings 32 | Bendigo and Adelaide Bank
Slide 33: Early access subscription
5,000 Early Access sub in the first 24 hours $25.00 Digital Only Membership $50.00 Merch + Digital Membership 33 | Bendigo and Adelaide Bank — Investor Day 2024
Slide 34: 34 | Bendigo and Adelaide Bank — Investor Day 2024
34 | Bendigo and Adelaide Bank — Investor Day 2024
Slide 35: Pathway to target ROE
05 Pathway to target ROE Andrew Morgan, Chief Financial Officer
Slide 36: Strong balance sheet to support our growth aspirations
Strong balance sheet to support our growth aspirations Capital Funding CET1 (Standardised basis)1 S&P RAC ratio2 Household Deposits / Loans Ratio3 1 12% differential translates into 11.12% 14.2% 73% $7b lower reliance on wholesale debt markets for BEN 61% 12.1% 9.49% BEN Major Average BEN Major Aver
Slide 37: Operating expenses managed at or below inflation
Operating expenses managed at or below inflation levels Modernise technolog y Reduce complexit y Accelerate digital 8 core systems to 3 1Reduced IT 13 brands to 71 Business and Agri division Digital mortgage First bank to launch applications by 50% settlements 19.1% at 3Q24 all the “pays” Migrated 4
Slide 38: Investing in our business
Investing in our business Continuing to invest for long-term simplification benefits Open Banking Foundational Up Bendigo lending Business & Agri spend Deposits and Home platform simplified operating model including pricing engine, Lending commenced and in collateral management progress Investment
Slide 39: Pathway to achieving target ROE
Continued focus on cost Pathway to achieving management and targeting target ROE improvement in C TI ratio 1 Total Digital deposits $m 3,201 Investing in our deposit gathering franchise with 1,266 Up and Bendigo underpinned by the strength of Total our Community Bank model 201 1,935 168 1 Digital de
Slide 40: Q&A Session
06 Q&A Session
Slide 41: Closing
07 Closing Marnie Baker, Chief Executive Officer and Managing Director
Slide 42: Australia's bank of choice
Australia's 2028+ Creating bank of sustainable returns Supported by choice Well managed cost base Growing above system in deposits and lending, within capital allocation hurdles FY24–FY28 Australia’s bank FY18–FY23 of choice Foundational Australia’s most trusted bank Leading trust and advocacy d
Slide 43: Important information
Important information This document is a presentation of general background information about the Group’s This presentation does not constitute an offer to sell, or the solicitation of an offer to activities current at the date of the presentation. It is information in a summar y form and no buy, an
Slide 44: Reporting Suite — prioritising our approach
Reporting Suite — prioritising our approach We leverage a range of global and domestic frameworks and guidance to focus on the risks and opportunities that matter United Nations Sustainable Development Goals 05 10 11 13 Gender Equality Reduced inequalities Sustainable cities and communities Climate
Slide 45: Shareholder Centre
Shareholder Centre 1H24 Results Annual Corporate Investor Sustainabilit y Presentation Financial Governance Calendar Report www.bendigoadelaide.com.a Report Statement www.bendigoadelaide.com.a including Climate-related u/globalassets/documents/ www.bendigoadelaide.com.a www.bendigoadelaide.com.a u/i
Slide 46: Transcript
This transcript was exported on May 26, 2024 Bendigo Bank Advertisement Plays Sam Miller: So welcome to Investor Day. My name's Sam Miller, I'm head of ESG and IR actually as well. Before I start, I'd like to acknowledge the traditional owners of the land in which we meet today. Here in Sydney, it's
Slide 47: Transcript
This transcript was exported on May 26, 2024 If you leave today and take away only one thing, I want you to remember this. Bendigo Bank is the only credible challenger to the major banks. There is no one else that has the strength, capability, and differentiation that Bendigo has. Our balance sheet
Slide 48: Transcript
This transcript was exported on May 26, 2024 agri division, our key target segments, and showcase the foundation of our new platform due later this year. Richard Fennell will highlight how our new Bendigo Lending Platform will facilitate the deepening of relationships with our broker-originated cust
Slide 49: Transcript
This transcript was exported on May 26, 2024 being efficient, leveraging common APIs to support multiple experiences seamlessly connecting our systems to talk to each other, automating processes, and driving faster decisions. Bendigo's new lending platform has been composed with more than 180 reusab
Slide 50: Transcript
This transcript was exported on May 26, 2024 Our term deposit digital sales have also seen strong growth and last month accounted for more than 20% of all term deposit sales. Andrew will talk to this further in our pathway to achieve our ROE targets. We have proven that, when designed well with intu
Slide 51: Transcript
This transcript was exported on May 26, 2024 program. And the Bendigo Lending Platform is also in flight. We finished most of the build for our broker partners and we'll move to complete the balance of the program into the next year. In respect of the key benefits we expect to realise through our in
Slide 52: Transcript
This transcript was exported on May 26, 2024 So, what we announced, Brett, was a year-to-date margin. And actually, if we go back to what we said in the first half, what we said has actually come to pass, and so what we said was we expected to continue to see benefits from our replicating portfolio.
Slide 53: Transcript
This transcript was exported on May 26, 2024 We'll go to Victor, please, Eleisa. Victor Guerin (Macquarie): Thank you. Victor Guerin from Macquarie. Appreciate Marnie, you told us to stay away from financial models, but just to gently coming back. You've obviously done a lot of hard work and you've
Slide 54: Transcript
This transcript was exported on May 26, 2024 we hear, "This is going to be a great efficiency gain, this is going to really put our cost down and our revenue's going to expand, and our ROE is going to expand." Never has it occurred, because all that happens is that all the competitors in the market
Slide 55: Transcript
This transcript was exported on May 26, 2024 Andrew Morgan: This is about what we can control, Andrew. Of course, we are not price makers in market, we're price takers, but we know today that, and you all know this as well, we haven't really grown in broker- introduced lending for some time now and,
Slide 56: Transcript
This transcript was exported on May 26, 2024 saying that our digital mortgages are our strongest returning channel, and that's why we've been putting our capital to work. As we've seen the economics improve somewhat in broker-introduced lending, that's a channel that's starting to become more attrac
Slide 57: Transcript
This transcript was exported on May 26, 2024 The large part of the investment, though, Andrew, is through this year and next year. And through the first half results, we talked about some of that, there'll be an amount in the second half, and then we'll talk further about what next year might or mig
Slide 58: Transcript
This transcript was exported on May 26, 2024 Brian… Brian Johnson (MST): Brian Johnson, MST. Congratulations on really good presentations and also congratulations on actually achieving something. Often, we come along to these things and it's all about jibber without actually seeing very much, so wel
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This transcript was exported on May 26, 2024 Brian Johnson (MST): Cost of capital [inaudible 00:50:24]. Andrew Morgan: Of course, there's a risk there, Brian. And who knows what sort pricing behaviour might be happening in market in both lending and deposits over that time period? All we can do is m
Slide 60: Transcript
This transcript was exported on May 26, 2024 of managing those loans. In particular, construction, because there's an ongoing processing requirement, and so you need to charge a premium on those. Azib Khan (Evans and Partner): Can I take your last point to mean that you can only automate constructio
Slide 61: Transcript
This transcript was exported on May 26, 2024 Richard Wiles (Morgan Stanley) Thank you. Richard Wiles, Morgan Stanley. Marnie, one way you could interpret today's presentation is to say that you have settled on the strategy, you want to be less complex, have less systems, less brands, and then, with
Slide 62: Transcript
This transcript was exported on May 26, 2024 Thank you very much, Matt Dunger from Bank of America. Perhaps following on from that, just on the partnerships you talked about, the work you've done on the API's is creating greater flexibility. Can you talk to what you're working on at the moment and w
Slide 63: Transcript
This transcript was exported on May 26, 2024 Marnie Baker: From a revenue perspective, too. I mean, we also partner in a distribution sense. So Qantas is a really great example of that. Tiimely actually supports us from a platform perspective, or a lot of the brands that we have from a platform pers
Slide 64: Transcript
This transcript was exported on May 26, 2024 Andrew Morgan: Can I... Sorry, let me finish. I said we would provide detail in August and I also said through the course of the speech that we don't envisage investment spend falling anytime soon. We know what we know today, so we've laid out programmes
Slide 65: Transcript
This transcript was exported on May 26, 2024 Thanks, Michelle. Yes? Eric Johnston (The Australian): Thank you. Eric Johnston with the Australian. Marnie, what's the higher-hanging fruit in this journey? So as you move forward, what's the really critical moment? Marnie Baker: I think I alluded to...
Slide 66: Transcript
This transcript was exported on May 26, 2024 Marnie Baker: Thank you. So there has been a lot to take in today, and we recognise that. And we don't want the conversation to finish just today. And why I was trying to field you towards the other executive that are here, you get access regularly to mys